Restaurant Brands International(QSR) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated system-wide sales grew by 6.9% year-over-year, reaching $12,282 million in Q3 2025, compared to $11,433 million in Q3 2024[2][3] - Comparable sales accelerated to 4.0%, with notable performances of 6.4% at Burger King International, 4.2% at Tim Hortons Canada, and 3.2% at Burger King US[2][3] - Adjusted Operating Income (AOI) increased to $702 million in Q3 2025, reflecting an organic AOI growth of 8.8%[3][12] - Net income from continuing operations rose to $440 million, with diluted earnings per share from continuing operations at $0.96[3][12] - Total revenues for Q3 2025 reached $2,449 million, a 6.9% increase from $2,291 million in Q3 2024[36] - Net income attributable to common shareholders for Q3 2025 was $315 million, compared to $252 million in Q3 2024, reflecting a 25% increase[36] - Basic net income per share from continuing operations increased to $0.97 in Q3 2025, up from $0.79 in Q3 2024[36] - Adjusted EBITDA for the three months ended September 30, 2025, was $794 million, up 6.0% from $748 million in 2024[58] - Adjusted diluted earnings per share for Q3 2025 increased to $1.03 from $0.93 in Q3 2024, marking a 10.8% rise[67] Sales Growth - System-wide sales growth for Tim Hortons was 4.8% in Q3 2025, with total revenues of $1,125 million[11][12] - Burger King's system-wide sales grew by 2.3% in Q3 2025, totaling $2,956 million[14] - System-wide Sales for Burger King reached $1,519 million in Q3 2025, reflecting a 0.7% growth compared to Q3 2024[19] - Comparable Sales in the US decreased by 2.0% in Q3 2025, while international comparable sales increased by 6.4%[21] - The FHS segment reported a System-wide Sales growth of 10.7% in Q3 2025, with Total Revenues increasing to $60 million from $53 million[20] - The INTL segment achieved System-wide Sales of $5,447 million in Q3 2025, a significant increase from $4,780 million in Q3 2024[21] Investments and Acquisitions - The acquisition of Carrols Restaurant Group and Popeyes China was completed in 2024, establishing a new segment, Restaurant Holdings[4][5] - Burger King is investing up to $700 million in its "Reclaim the Flame" plan through 2028, focusing on advertising, digital investments, and restaurant enhancements[17] - The company expects to incur additional costs related to acquisitions in 2025, indicating ongoing market expansion efforts[68] Financial Position - The company reported a net leverage ratio of 4.4x, down from 4.8x in the previous year[3] - Total assets as of September 30, 2025, were $25,669 million, an increase from $24,632 million as of December 31, 2024[38] - Cash and cash equivalents decreased to $1,206 million as of September 30, 2025, down from $1,334 million at the end of 2024[38] - Long-term debt, net of current portion, was $13,415 million as of September 30, 2025, slightly down from $13,455 million at the end of 2024[38] - The company’s total liabilities increased to $20,504 million as of September 30, 2025, compared to $19,789 million at the end of 2024[38] Cash Flow and Capital Management - Net cash provided by operating activities from continuing operations increased to $1,159 million, up 13.4% from $1,022 million in the previous year[40] - Net cash used for investing activities from continuing operations decreased significantly to $213 million from $616 million in 2024, indicating improved capital management[40] - Free Cash Flow (FCF) is calculated as net cash provided by operating activities minus payments for property and equipment, serving as a liquidity measure[55] - Free cash flow for the nine months ended September 30, 2025, was $996 million, compared to $898 million in 2024, representing an increase of 11.0%[65] Future Outlook - The company is on track for at least 8% organic Adjusted Operating Income growth in 2025[2] - For 2025, the company expects consolidated capital expenditures to be around $400 million[27] - The company anticipates achieving over 5% Net Restaurant Growth towards the end of its long-term performance period from 2024 to 2028[28] - The company plans to enhance operations and drive long-term sustainable growth through various strategies, including refranchising efforts and new partnerships in international markets[34] Tax and Regulatory Considerations - The effective tax rate increased due to the impact of OECD Pillar II guidance, affecting future tax planning strategies[68]